Increasing effectiveness, not just efficiency, will be GenAI’s big payoff
Every large company is trying to figure out how and where to use generative AI to best effect. Over the past 18 months, there’s been a lot of experimentation, but consulting firm McKinsey says companies “are only scratching the surface of gen AI in corporate and business functions.”
In a new article, McKinsey says “most companies are pursuing efficiency gains with gen AI, but leaders believe the real value of the technology will accrue from applications that transform the effectiveness of business functions… Effectiveness offers much more potential value. Improving forecast accuracy, understanding markets more deeply, or optimizing capital allocation might unlock truly significant cost savings and growth opportunities.”
Where gen AI already is “effective”
At Northern Light, we see that beginning to happen at our Fortune 1000 clients who use the generative AI capabilities within SinglePoint™ (our market and competitive intelligence knowledge management platform) to summarize documents pertinent to users’ research projects. Clients tell us the value they derive combines both efficiency and effectiveness – they distill meaningful insights from research documents faster (“efficiency”), and they can put those insights in context and apply them to make better business decisions (“effectiveness”).
Of course, McKinsey isn’t the only firm assessing the current and future potential impact of generative AI. IT industry analyst Gartner presents the opportunity for maximum gen AI value within the enterprise this way:
Gartner, “Who Benefits Most from Generative AI Productivity?” by Nate Suda, Jasleen Kaur Sindhu, Sharon Chinn, 4 June 2024. GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.
Gartner describes a “zone of deep productivity” in which, at the top end, highly experienced workers doing complex tasks reap the greatest benefits of generative AI. Northern Light considers strategic planners and product managers, among others, who employ gen AI to help mine competitive intelligence research to inform their vital business decisions to be situated at the high end of Gartner’s “zone of deep productivity”.
Since we regard “productivity” as a combination of efficiency and effectiveness, Northern Light sees a direct connection between McKinsey’s and Gartner’s perspectives on generative AI. And, most importantly, we see large companies putting gen AI to meaningful use and reaping the benefits in their market and competitive intelligence efforts even as they continue to wrestle with how and where else to use it.